Bufu Trend Trading System For MT4

Bufu Trend Trading System For MT4

 

Table Of Contents:

  1. Bufu Trend Trading System For MT4
  2. Indicators Used and Chart Setup
  3. Trading the Strategy
  4. 1. Long entry
    1. Stop-Loss (SL) and Take Profit (TP) Settings
  5. 2. Short entry
    1. Stop-Loss (SL) and Take Profit (TP) Settings
  6. Conclusion

 

Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.

 

The Bufu Trend Trading System for MT4 is appropriately named; it was primarily designed to be a trend-following strategy that picks out the trend and follows it, subject to confirmation from a momentum indicator.

However, this strategy can also be used to trade range bound situations, and this is what will be demonstrated in this article. The essence of using a momentum indicator is to filter out any signals which do not match the correct entry parameters.



FREE Bufu Trend Trading System

Download the FREE Bufu Trend Trading System for MT4.

To receive my email 100% sure: 
Put my email on your whitelist!

 

Indicators Used and Chart Setup

 

The system makes use of multiple indicators, and is built to trade assets of any kind, including currency pairs, on the 30-minute charts and higher time frames. The indicators used for this strategy are listed below:

 

    1. Stoch Candles ( Based on stochastic indicator);

    2. Bufu trend signals

    3. Support and resistance indicator

    4. Trend Channel indicator

    5. Wave Arrows

 

The Stochastics candles are based on the native Stochastics indicator, but have been modified to apply a colour coding on the individual candlesticks in order to alert the trader to when there is predominant buying pressure, or when the sellers are in control of the market. The candles have been programmed to display a RED colour when there is buying momentum, and a BLUE colour when there is selling momentum. Please note the colour changes.

The Bufu Trend Signals indicator is a momentum indicator that exerts its action using colour changes. The count bars display either a blue (buy), red (sell) or yellow colour (flat or range-bound) for times when the market is trending upwards, downwards or is range-bound. For this strategy, we are solely interested in when the colour is yellow.

The Support and Resistance indicator is pivotal to this strategy, as it sets the boundaries for the range that the trader will trade. The indicator displays the most critical support and resistance levels on the chart. Blue dots represent the most important support levels, while red dots show crucial resistance levels. This indicator can also be used in the setting of the protection stops and profit targets for the strategy.

The Trend Channel indicator is what identifies the trend visually. It doesn't indicate buy/sell points, but shows oversold and overbought market zones. If the red lines are above the yellow line, the market is overbought and a downside reversal is possible. If the red lines are below the yellow line, the market is oversold and provides an opportunity for an upside reversal.

The Wave arrow indicator is based on fractals and provides colour changes that indicate entry and exit suggestions in the form of Red (sell) and Blue (buy) arrows.


Trading the Strategy

 

This section describes how to pick your long and short trade signals, even when the market is trading sideways.

 

1. Long entry

 

Here are the long trade entry conditions:

 

    • The Bufu Trend Signals indicator will be showing a yellow colour, signifying that the market is flat.

 

    • Price is at a lower band of the Trend Channel indicator, and is also at the blue support line of the Support and Resistance indicator.



    • Once the blue arrow of the Waves arrow indicator appears, buy immediately without waiting for the candle to close.



We can see that there were two setups where the signals were valid. In one setup, the arrow appeared when the price was at the support line and lower band of the Trend Channel indicator. The second signal appeared when the price bounced off a support line. There was a 3rd instance where price bounced off the lower band of the channel, but there was no arrow so this signal would have been ignored in a live setup.

Stop-Loss (SL) and Take Profit (TP) Settings

The Stop Loss should be set at a price slightly below the arrow entry point. The Take Profit is set at the middle band of the Trend Channel. This is the initial exit point. Traders can close hal the position, then enter a trailing stop to chase the position until it gets to the upper band of the Trend Channel, a resistance line, or until the trade runs out of momentum (as in the 2nd example). The SL:TP ratio should be a minimum of 1:2, since the short term charts are used for the strategy and the pip range is smaller in this instance

 

2. Short entry

 

The rules required for setting up a short entry on the asset are as follows:

 

    • The Bufu Trend Signals indicator still shows a yellow colour, signifying a flat market scenario.

 

    • Price is at the upper band of the Trend Channel indicator, or is at the red resistance line of the Support and Resistance indicator. In some cases, both situations are seen together (as in SELL1 and SELL2 setups below).


    • Once the red arrow of the Waves arrow indicator appears, sell immediately. Do not wait for the candle to close.



The short trade setup for this strategy shows three possible sell areas. These all fulfilled the parameters described for short trades.

 

Stop-Loss (SL) and Take Profit (TP) Settings

The Stop Loss should be set at a price slightly above the red arrow, while the Take Profit should be set at the yellow middle band of the Trend Channel indicator in the first instance. Once this target is achieved, close half the position and use a trailing stop to let the rest of the trade run to conclusion at the lower band of the Trend Channel indicator, or towards a blue support line (whichever comes first). Sometimes, the trade may not get to the lower band before exhaustion, but the trailing stop protects the position.

 

Conclusion

 

This is one of the few instances where traders can actually trade markets which are going sideways. These tend to produce accurate signals as the commencement and termination points for the trades are clearly defined by the Trend Channel Indicator’s bands, as well as the Support and Resistance indicator lines.

Download the complete system description and the files here:

FREE Bufu Trend Trading System

Download the FREE Bufu Trend Trading System for MT4.

To receive my email 100% sure: 
Put my email on your whitelist!

 

Partially Automated Trading Besides Your Day Job

Alerts In Real-Time When Divergences Occur

My Recommended MT4/MT5 Broker

About Me

I'm Mike Semlitsch the owner of PerfectTrendSystem.com. My trading career started in 2007. Since 2013 I have helped thousands of traders to take their trading to the next level. Many of them are now constantly profitable traders. 

The following performance was achieved by me while trading live in front of hundreds of my clients:

Connect With Me:  

Results From 5 Months!
This service starts soon! Be the first who get's notified when it begins!

This FREE Indicator Can Transform
Your Trading!

FREE Indicator + Telegram Group


Request the Ultimate Double Top/Bottom Indicator which is used by 10,000+ traders.